Currency devaluation is quietly eating into your wealth, expert warns

India Today

2 hours ago

Many people may not realise it, but their savings could already be losing value. Finance educator Akshat Shrivastava has raised a warning that currency devaluation and continuous money printing are slowly reducing the real value of people's wealth. And this is happening without most people noticing it.In a post on social media platform X, Shrivastava explained this through a simple example. 'Imagine that your 2BHK flat is worth Rs 1 crore. The next year, its value falls to Rs 90 lakh. How would you feel?' he asked. 'What if I tell you: this is actually happening—without you even taking note of it.'Shrivastava's concern is not about direct price drops. Instead, he points to the slow and steady fall in the purchasing power of money. He says that this type of devaluation is not just visible when comparing currencies across countries, but also when comparing money to assets like gold, real estate, Bitcoin, or land.'Governments right now can print as much money as they wish. And, guess what? They are doing it,' he wrote. According to him, the rise in the supply of money is one of the key reasons for this quiet loss of wealth.He gave an example from the United States, where the Federal Reserve reportedly printed 20% of the total US money supply in just one year after the COVID-19 outbreak. While this helped in boosting short-term spending and supported the economy, Shrivastava says the long-term impact is more serious.'If the rate of money printing is 10%, and your post-tax deposit rate is 6%, your money is losing 4% of its value each year,' he said. In simple terms, if you keep your money in a bank savings account or fixed deposit and inflation or money printing rises faster than your interest earnings, you are becoming poorer over time.He also pointed out how many people don't seem worried about it. 'People don't protest. Because most of them don't bother with economics. Cricket and politics keep them busy,' he added, hinting that financial awareness is still low among the general public.To deal with the risk of devaluation, Shrivastava suggests investing in assets that tend to hold or increase value over time. 'Stocks, (good quality) real estate, gold, and Bitcoin are all hedges,' he said. However, he warned that these are not always safe either if one buys them at the wrong time.Giving an example, he said, 'If you would have bought BTC on its 2021 high, you would have made 0% returns for 3 years—even though its 10-year CAGR is 88%.' This means even strong long-term assets can give flat returns if purchased without proper timing or analysis.He believes that the real problem is not just picking the right assets but knowing how to invest wisely. 'Most people don't know how to execute these points: what assets to buy when, how to analyse value, how much to buy, how much cash to keep, and how to book profits,' Shrivastava explained.His final advice was not to blindly stick to one asset class or investment idea while ignoring the bigger risk. 'Every year, their wealth keeps going down—in real terms,' he warned.
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